Brexit. The B word that is on everybody’s minds right now, especially any Brit who is living in or considering a move to a European country. It’s hardly surprising then that a number of clients have asked me to write an article on the potential effects of a British exit from the European Union. So here’s my two (euro) cents’ worth.

This thing could run and run. In the meantime, there’s really no point in getting bogged down in pointless speculation but there are some things that we do know for sure and which I’ll try and outline here.

I can tell you for one that currently Brexit is, somewhat counter-intuitively, serving to give a push to my core market as Brits rush to get themselves established in Spain before Brexit kicks in, in whatever format it ends up taking. Many people who may have been dreaming for years of a move to Spain have suddenly found their plans firmly shoved from the back burner to the front as they see the possibility of their dreams being snatched away from them by external forces.

For the Brits who are already here and legally resident it is likely that not a huge amount will materially change although there will almost certainly be more bureaucratic hoops to jump through.

EU nationals living in Spain are required to register with the Spanish authorities (Extranjería). This resident’s document has no expiry date on it and many Brits are now keen to get over here and get registered as an EU resident as soon as possible in order to try and protect their automatic rights to live and work here. It is possible that the rights of those already resident before Brexit takes place will be protected, plus the sooner you get registered as resident the sooner you start clocking up years of residency, accumulating rights and moving towards a position where you could apply for permanent residency or citizenship. That being said, until negotiations take place over the rights of EU citizens in Britain and vice versa we can’t know for sure what the outcome will be.

The right to buy property and the right to own a business are enshrined under international law and so will not be affected by an exit from the EU.

The process for purchasing property in Spain is exactly the same for non-EU citizens as it is for EU ones. I have sold properties to South Africans, Americans, Brazilians and Australians as well as Europeans and it has been equally straightforward in all cases.

Where rights do differ is in the right to residency and to work. If we take the worst-case scenario and imagine a full-on hard Brexit, where Britain gives no quarter, leaves the single market and completely rejects free movement of labour then we would be looking at Brits having to go through the same processes as, say, an American citizen in order to obtain the right to live and work in Spain.

The thing to remember is that Americans and other non-EU citizens can and do manage to get work and residency permits for Spain. It may be a convoluted and time-consuming process but it is do-able and there is help out there. Sites like Spain Guru provide great advice on the processes that non-EU citizens need to go through in order to live and work legally in Spain. Check out their article on the main routes to getting a work-permit in Spain here.

As many of my clients are entrepreneurial types with aspirations to develop a business or work on a freelance basis here in Spain I know that the self-employment (or autónomo) option and that of owning a business will be of particular interest. Other routes to residency are also available however, such as a non-lucrative residency visa if you have funds to support yourself and do not need to seek employment in Spain – I have some South-African clients who now live here on this basis, for example.

So those are the worst-case, hardest-Brexit scenarios. As I said at the start though, we don’t know when or how Brexit will really happen and it’s not something that we have any control over. The bottom line is that if you really want to move to Spain then you need to find a way to make it work for you. And you will.

Our colleagues at Hifx International Payments have been very busy of late with all the market fluctuations and uncertainty surrounding Brexit but they have found time to issue some helpful information and advice for customers who need to make transfers abroad; whether for a one-off house purchase, payment of building costs, or regular transfer of pension or salary into euros.

We’ve reprinted their advice below so you can find out how best to insulate yourself from any Brexit fallout.

What impact is Brexit having on the Pound?

It’s been just over a week now since the surprise announcement that Britain had voted to leave the EU. Since then, there have been a number of movements in the Pound in both directions. While there have been lots of headlines about the Pound rising or falling, it’s worth remembering that we are still at the beginning of a long journey and it’s likely that there will be a more fluctuations – both up and down – along the way as markets react to each new development.

We’ve taken a look at some of the events that have impacted the Pound so far and looked forward to the events that may have an influence in the coming weeks.

The reaction so far;

It’s been a very busy period for the Pound. It was steadily climbing against the Dollar in the week leading up to the referendum but fell to a 31 year low once the results were announced, followed by a couple of ups and downs as the markets digested the news. A weaker pound is great news for any overseas investors looking to invest in UK property as it can mean substantial discounts in cost. Below is a chart which shows the difference in cost for £1,000,000 property between the highs and lows of the past 2 weeks;

High

Low

Potential Saving

USDGBP

$1,500,555

$1,314,698

$185,857

EURGBP

€1,313,698

€1,185,396

€128,302

SGDGBP

SG2,005,696

SG$1,781,864

SG$223,832

HKDGBP

HK$11,640,088

HK$10,203,040

HK$1,437,048

AEDGBP

AED5,511,768

AED4,828,818

AED682,950

GBPUSD Referendum

So what have been the main factors affecting these movements?

Throughout the referendum campaign period, the Pound generally tended to rise if opinion polls were in favour of Remain and fall if they showed a lead for Leave. On voting day, both the final opinion polls and the betting odds were suggesting that a vote to remain in the EU was most likely, causing the Pound to climb to 1.50 against the Dollar, the highest it has been so far in 2016.

This changed rapidly when the first results started to come through, as they suggested that Remain had not done as well as expected. The Pound continued to fall through early Friday morning, falling as low as 1.33, the lowest level since 1985. But after the initial shock, the markets did start to stabilise.

Throughout Monday and Tuesday, the initial signs were that the market was starting to recover from the shock, as both the FTSE 100 and the Pound started to rise again. But markets then became more nervous again on Thursday, when the Bank of England suggested that some monetary stimulus was likely to be necessary over the summer.

The situation has been broadly similar for the Pound against the Euro. However, it has been slightly complicated by the fact that the European markets were also influenced by the referendum result. This means that, comparatively, some of the fluctuations between the Pound and the Euro have been less severe than between the Pound and the Dollar:

GBPEUR Referendum

What will happen next?

The reaction so far has shown that the Pound is currently in a volatile position. Each piece of breaking news can have a short term effect on its value, but the longer term picture is currently much harder to predict as there simply isn’t enough information at this point.

But there are a few key events to look out for that may have an impact:

More economic data: this should start to come through in late July and it might provide a clearer picture of how the UK has been affected by the referendum result.

Monetary policy action from the Bank of England: Mark Carney has given a clear signal that the Bank of England will be looking at how they can try to offset some of the negative economic shock that they expect to see following the referendum result, possibly this month.

New Conservative leader: a removal in uncertainty could cause the Pound to rise, but it may depend on who is chosen. For example, the Pound briefly rose when Boris Johnson announced he wouldn’t be standing in the leadership election.

Article 50 triggered: a delay in this could cause the markets to become nervous again due to the ongoing uncertainty, which may cause the Pound to gradually decline.

New trading deals: if it appears these will be favourable for the UK, the Pound is likely to rise. But delays in negotiations or negative sentiment from Europe could have the opposite effect.

How can you prepare?

The good news is that, whatever happens next, there are a few options for you to consider that could help to reduce the risk of currency fluctuations.

If you spot a favourable rate, we also have a couple of ways to help you take advantage of this. If you know you have a single large payment coming up, such as a property purchase, you could set up a forward contract. This allows you to buy currency at the current rates, but pay for the majority of it up to two years later.

If you need to make regular transfers, such as for a mortgage or a pension, we can help you set up a regular payment plan. This automates your payments and secures the current exchange rate for up to two years.

If you’d like to keep an eye on exchange rates, we can help you. On our Marketwatch page, you can watch the market trends or sign up for daily rate alerts on a range of our most popular currencies. If you sign up for a HiFX account, you will also have the option to set up personalised rate alerts, which will let you know when your target currency hits your desired rate.

Whatever your international payment needs, HiFX is on hand to help. If you’d like to find out more, please call our friendly experts at your local Spanish office 0034 951 203 986 or email costadelsol@hifx.co.uk